With the expansion of the Indian Economy, the cross-border trade has boomed and the necessity for organisation and oversight of the same has also increased. The government of India has put up many measures to keep a check on the materials imported in India and exported out of India.
One of such measures is Import Export Code (IEC) which has been put in place as a legal identification of any importer or exporter in India and helps the government in collection of custom duties and fulfilment of other regulations related to the foreign policy.
What is IEC?
- The Director General of Foreign Trade (DGFT) issues a key business identification number that is known as an Importer-Exporter Code (IEC) which is compulsory for import to India or export from India.
- Without getting an IEC, no importing or exporting of goods can be made by any person unless specifically exempted. For services exports however, IEC shall not be necessary except when the service provider is taking benefits under the Foreign Trade Policy.
- Upon introduction of GST, IEC being issued is the same as the firm’s PAN. However, the IEC will be issued separately by DGFT based on an application. The nature of the firm that is obtaining an IEC may be a Partnership, Proprietorship, LLP, Limited Company, HUF, Trust, or Society.
Benefits of IEC
Apart from the legal requirements for import/export code for an entity, below are the key benefits of the same.
- Tax Benefits: Entities having an IEC can take the advantage of various export incentive schemes that are introduced by the government. They can also claim tax rebates/refunds on exports. Entities doing Exports under Letter of Undertaking under GST could be exempted from taxation on exported goods and services.
- Global Market Access: IEC facilitates the entry of a firm in the international market that allows organizations to sell products on global platforms with ease.
- Easier Compliances: IEC provides single window registration for various other websites such as ICEGATE, Customs etc as they all require the entity to obtain IEC.
Eligibility for IEC
- IEC may be applied on behalf of an entity which may be a Proprietorship, Partnership, LLP, Limited Company, Trust, HUF, Society.
- The Entity must have a PAN, bank account in the name of the entity and a valid address before applying for IEC.
- The DGFT might be physically verified on issuance of the IEC.
Process to Obtain IEC
Below process is to be followed for application of Import Export Code (IEC) on the Director General of Foreign Trade (DGFT) portal.
In the registration form under the option “Register User As,” select “Importer/Exporter” / “Foreign Importer/Exporter” (as the case may be). Complete the form login the Name, Address, valid Phone Number and E-mail address. The portal will confirm the Phone Number & email address via OTP.
2. Step-2: Start application – Login with the credentials created in Step-1 and click on “Apply for IEC” and click the “Start Fresh Application” button.
3. Step-3: Fill the application form – The entity needs to complete the application form by filing out details like
A. Name
B. Address
C. PAN
D. GSTIN
E. Bank details
F. Directors/Partners – including their PAN & Adhaar (Passport No. in case of foreign directors)
G. Authorised Signatory – including their PAN & Adhaar
H. Details of Goods/Services to be imported.
Following documents are also required to be uploaded to the DGFT portal while filing the details:
A. Scanned Photograph (of Authorised Signatory)
B. Scanned Address Proof (electricity Bill/water bill/Rent Agreement/NOC etc)
C. Scanned Adhaar (in Case of Individual)
D. Scanned Certificate of Incorporation (in case of companies)
E. Scanned PAN
F. Scanned GST Certificate
G. Scanned Bank Statement/Passbook/cancelled cheque
4. Step-4: Submit the application form – The form can be submitted after verification of the authorised person as mentioned in the application form. The verification can be done in the following manner:
A. Adhaar Authentication – an OTP is sent on the phone number linked with the Adhaar Card of the authorised signatory.
B. DSC Authentication – the authorised signatory needs to attach the Digital Signing Certificate (DGFT) on the application form.
5. Step-5: Payment of fees – Once the application is submitted, applicant will be redirected to the payment gateway to pay the application fee of INR 500 (amount may change from time to time, as decided by DGFT).
After the payment is completed, you will be redirected to the DGFT website, and receipt will be displayed on the screen. The receipt can be downloaded for future reference.
The IEC certificate will be sent to the registered email address used for creating the DGFT login. Alternatively, the IEC certificate can be downloaded by logging into the DGFT website under the “Manage IEC” Tab.
Renewal of IEC
To continue the seamless usage of IEC for various purposes, each entity needs to renew the IEC each financial year up to 30th June of that financial year. For example, for FY 24-25, IEC needs to be renewed/updated till 30th June 2024. Below is the process to renew/update IEC:
- Login to the DGFT portal using the credentials created at time of IEC application.
- Go to “IEC Portfolio Management” tab under the “Services tab” and click on ‘Update/Modify IEC.’
- A form with the existing IEC details will appear, which will contain information submitted at time of application of IEC. The applicant can either confirm or modify the information as per the status at time of renewal.
- Now, complete the application and submit the form verifying the IEC certificate using Aadhaar Card or digital signature certificate.
- Once the IEC update form is submitted, IEC renewal will be complete.
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